Boo.com
Boo.com was an English internet company that wanted to establish itself as a global online shop for fashion & sportswear in the new economy in the late 1990s . In May 2000 the company went with bursting of the speculative bubble in the bankruptcy .
Company history
Boo.com was founded by the Swedes Ernst Malmsten, Kajsa Leander and Patrik Hedelin in 1998 in London . The company's business objective was to sell fashion and sporting goods online. Customers should be able to purchase attractive fashion labels at low prices and with free shipping . The concept was very well received. Within a very short time, the company founders raised $ 120 million in investor money. Among the investors were well-known companies from trade and economy, Benetton , JP Morgan and Goldman Sachs . The French luxury goods tycoon Bernard Arnault also participated in the company.
The bankruptcy
The company's bankruptcy in May 2000 came abruptly and is considered one of the most spectacular Internet bankruptcies of all time. In retrospect, it turned out that many serious homemade mistakes had caused the breakdown. The problems started back in 1999.
- Expensive advertisements were placed that fizzled out without any effect because the start of the online fashion business was significantly delayed.
- Technical difficulties accompanied the launch of the online portal, which was postponed several times. The operating functions were immature and hindered the design of an "extravagant" website. The result was a large, clumsy, and cluttered portal that most customers could barely access, as huge amounts of data overwhelmed the Internet modems, which were still slow at the time. The site was based on JavaScript and Flash in order to display the product range as well as the mascot and sales aid avatar Miss Boo in a pseudo-3D animation. The main page contained the warning: "This site is designed for 56K modems and above". The interface was also too complex because its tiered structure required the customer to answer five to six questions before he could see that the goods he wanted were out of stock.
- The free shipping tore immense financial holes in the company's budget. Boo.com had to pay the costs itself. To make matters worse, users increasingly made use of their exchange rights , which blew up the costs and resulted in billions of millions of dollars for the company, because the service provider for the exchange, Deutsche Post , billed the costs to boo.com .
- In addition, there were typical mistakes of the New Economy that affected personnel management. Uncontrolled employee recruitment, failure to establish clear management structures, above-average salaries and excessive expense reports when exploring international markets flanked the decline. The investors refused to provide additional money.
It was not possible to sell the company. Promising contract negotiations failed due to the cooled interest of investors in investing in business-to-consumer businesses.
See also
literature
- Ernst Malmsten, Boo Hoo: A dot.com Story from Concept to Catastrophe. Random House Business Books. (2001), ISBN 978-0-7126-7239-9 .
Individual evidence
- ↑ The Resurrection of the Dotcom Corpse accessed on August 29, 2012 (welt.de)
- ↑ Keith Regan & Paul A. Greenberg E-Commerce Times, Boo.com Burns Out, accessed August 29, 2012 (ecommercetimes.com)
- ↑ Tunweer Malik, Investing Like Warren Buffett , Chapter 1, Speculation
- ↑ The greatest defunct Web sites and dotcom disasters ( Memento of the original from February 26, 2013 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. accessed on August 29, 2012 (cnet.uk)
- ↑ Boo.com spent fast and died young but its legacy shaped internet retailing. Retrieved August 29, 2012 (guardian.co.uk)
- ↑ Boo.com broke: Warning signal for e-commerce companies accessed on August 29, 2012 (heise.de)
